New CEO, New Challenges for Red Envelope

Red Envelope is marking what it expects will be its first profitable year in an unusual way: by changing CEOs. President/CEO Martin McClanan agreed in late February to leave the gifts cataloger/i.merchant on April 8.

Replacing McClanan will be Alison May, chief operating officer/acting chief financial officer at children’s recreation center operator and clothing marketer Gymboree Corp. Prior to her stint at Gymboree, May held executive posts with cataloger/retailers Esprit de Corps and Patagonia.

Hilary Billings, Red Envelope’s chairman/chief marketing officer, says that McClanan’s departure is a sign of the company’s growth. McClanan “is a major shareholder, and he agreed with the rest of the board that the company was ready for a seasoned retail executive whose primary strength was in operations and finance,” she says. “That’s not where his background and experience is.” Prior to joining Red Envelope, McClanan was in charge of marketing and business development for BigWords.com, an online textbook marketer, and oversaw the Internet brand management and business development for such companies as Williams-Sonoma, Levi Strauss, and Travelocity.

For his part, McClanan says he’s comfortable leaving Red Envelope in new hands, especially now that “the company has achieved a leadership position in the specialty-gift category.”

Billings credits McClanan with much of the four-year-old Red Envelope’s growth, “which is creating a shift in the decision-making for future opportunities,” she says. “Multichannel retail brands, international [expansion], and experience with public companies are things that will be on the horizon for the next few years here.” While Billings doesn’t have any detailed plan in place yet, she says the company is eyeing possible retail expansion and an initial public offering down the road.

Before she can tackle such matters, though, incoming CEO May will have to deal with more immediate fulfillment issues. Red Envelope will outgrow the Wilmington, OH, fulfillment center it uses by the end of this year, Billings says, so the company will have to decide whether to add space or change to a different facility or provider. The company currently contracts its fulfillment with back-end services provider 3PF.

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